Rapidly and currently needs to retain all of earnings

Assignment Help Financial Management
Reference no: EM132019183

Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Computech to begin paying dividends, beginning with a dividend of $0.50 coming 3 years from today. The dividend should grow rapidly-at a rate of 16% per year-during Years 4 and 5; but after Year 5, growth should be a constant 8% per year. If the required return on Computech is 16%, what is the value of the stock today? Round your answer to the nearest cent. Do not round your intermediate calculations.

Reference no: EM132019183

Questions Cloud

Explain cost accounting and what skills you can bring : The management team would like to know the profits they can expect from the two models of pitching machines they currently manufacture.
Distinguish between the different costing methods : The materials covered this week distinguish between the different costing methods and provides needed tools for decision making.
Compute the current break-even point in units : Compute the current break-even point in units, and compare it to the break-even point in units if Mary's ideas are used.
Find the yield rate : Both bonds are redeemable at par in the same number of years, and have the same yield rate. Find the yield rate.
Rapidly and currently needs to retain all of earnings : Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; what is the value of the stock today?
Explain circular flow of income in a frugal economy : Explain circular flow of income in a frugal economy
Were management decisions to stay competitive sound : Based on the static budget report: What was the primary cause(s) of the loss in net income? Were management's decisions to stay competitive sound?
Difference between information technology and systems : Discuss what is the difference between information technology and information systems. Evaluate the functions of information systems in businesses
Compute cost of debt and compute cost of prefer stock : Compute cost of debt. Compute cost of prefer stock.

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd